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Are Investors Undervaluing F.N.B. (FNB) Right Now?

Zacks Equity Research

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is F.N.B. (FNB). FNB is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 9.52 right now. For comparison, its industry sports an average P/E of 10.82. Over the past year, FNB's Forward P/E has been as high as 11.93 and as low as 8.18, with a median of 10.26.

FNB is also sporting a PEG ratio of 1. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. FNB's industry has an average PEG of 1.23 right now. Over the last 12 months, FNB's PEG has been as high as 1.26 and as low as 0.86, with a median of 1.08.

Another notable valuation metric for FNB is its P/B ratio of 0.81. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.57. FNB's P/B has been as high as 1.05 and as low as 0.70, with a median of 0.86, over the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. FNB has a P/S ratio of 2.5. This compares to its industry's average P/S of 2.88.

Finally, we should also recognize that FNB has a P/CF ratio of 7.86. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. FNB's current P/CF looks attractive when compared to its industry's average P/CF of 11.28. FNB's P/CF has been as high as 12.79 and as low as 6.65, with a median of 8.42, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that F.N.B. Is likely undervalued currently. And when considering the strength of its earnings outlook, FNB sticks out at as one of the market's strongest value stocks.


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